In Dubai, Villa Rents Are up Compared to Apartments

While apartment rents have been stagnant, villa rents have soared in the past five years. Rent for villas in Dubai has climbed as much as 25 percent. Apartments remain affordable largely due to the limited new supply. Though apartment rentals are yet to see any sort of sustained increases in Dubai, you can still find a suitable property because they’re currently within your budget.

Dubai Apartments

Most residential locations in the city face that problem, research by Core consultancy found. The Palm is the only exception to this. So Dubai's property activity pick up is mostly on the sales end. A sharp rise won't be something to worry about for quite some time. According to the Core report, "citywide apartment rents are still lower by 5 per cent than in the third quarter of 2020."

Two more places that can see rent starting to make major gains are Downtown and the Dubai Marina. The cluster at Jumeirah Village Circle has constant demands on record from those hoping to move into a centralised location. However, there is new supply for a rental increase to be prevented.

Drops

Affordable communities seen the largest decline in rent rates – and those rates will take even longer to recover. Dubai Sports City has seen its rents decline by 12% over the past year, while Dubailand has seen average rates decline by 10%. At Discovery Gardens, rents are down 20% from a year ago.

Slow Rental Dips

Dubai rental recovery is not linear. Some apartment buildings are still struggling to fill their vacant apartments, while other buildings have not seen any vacancies for a long time. Construction on an estimated 37,000 new homes is expected by December 31. Already, over 25,000 new units were constructed in the first nine months of building, many of which will be pushed into the rental market. As a result, sudden increases to the overall rent are unlikely.

As the absorption rate increases, businesses will need to hire new workers. This has been a slow process, since the installment of new staff has increased in small increments, over a period of three months or so. However, local sources say that next March, when the full impact of these new jobs is seen in the local rental market, there will be a surge in available housing.

The Buyers' Market

Potential buyers are flocking to pay off their apartments early. One program allows buyers to finish paying off their property in 10 years’ time, but with a caveat: they will have to wait five years or more before actually moving in. In addition, the developer is offering a special deal where they can buy the property immediately if they pay off a certain amount of their mortgage in addition to their initial down payment.

Conclusion

Apartments and villas are both great options for living arrangements in Dubai. Given certain economical factors, apartments are currently more affordable. The buyers' market is currently thriving; they're all trying to pay their apartments off as early as possible.

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